Retail sales were flat in July despite outlets trying to haul shoppers to the till with massive discounts.
Shops have been tempting consumers with discounts as high as 70 per cent – Sports Direct is now having a "flash sale" offering discounts of up to 90 per cent – but there has been no growth in year-on-year sales, according to BDO’s high street sales tracker.
Sophie Michael, head of retail and wholesale at BDO, said high streets have become "littered with red banners" and that it has become difficult for retailers to break customers’ bargain-hunting habits.
There was an up-tick in sales in the final week of July, which Michael suspects was due to an extended sales season.
"We’ve even seen discounts on new products – there’s clearly a nervousness with some retailers," Michael said.
"There’s a cost behind that which we won’t see until the results start coming out. I think retailers will start to think about how to protect their margins."
Footfall on high streets declined for the first three weeks of the month, BDO said, before increasing slightly. Shopping centres were hit by declining footfall for the whole of July.
This is the sixth month in a row that retailers have had no sales growth. Fashion sales did particularly badly, down one per cent as compared to July last year. The best performers were homeware sales and non-store sales, which grew by 4.7 per cent and 21.7 per cent respectively.
The growth in non-store sales was the sector's best since September 2015, BDO said, and some fashion outlets benefited from double or even triple online sales growth in July.
Hedley Aylott, chief executive of retail specialist Summit, said the BDO figures show more people are shopping online, but "there is still a huge opportunity for growth".
Aylott said: "Despite an increased customer base retailers are not getting it right online and delivering what customers expect in the digital age.
"Even some of the top retailers in the UK are not fulfilling their potential online. Slow site speeds, long forms for customers to fill out and poor imagery is slowing the customer’s journey to purchase, and ultimately losing retailers’ sales.
"In addition, retailers often use an unscientific approach when it comes to setting online marketing budget, due to a lack of understanding and an acute recognition of return on investment."